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Top 6 Reasons to Not Buy a Home—Debunked

Top 6 Reasons to Not Buy a Home—Debunked

You? Buy a home? If that prospect sounds as unlikely as your becoming the next U.S. president—well, this campaign season has shown us that anything can happen.

Sure, amassing the funds and slogging through the necessary paperwork for your own piece of the real estate pie can be daunting, especially if you’re a less-than-stellar loan candidate. Still, if you just assume there’s no way you could buy a home, without doing any research, you could be missing out.

Here are some oft-cited reasons people don’t buy a home, and the reality checks showing why they shouldn’t give up hope.

Reason No. 1: ‘I don’t have enough money for a down payment’

This is probably the most common justification for not making the leap into homeownership. After all, few people have a huge chunk of cash lying around—and you need 20% down to buy a home, right? Wrong.

“Needing a 20% down payment has lingered as a myth for years and causes many potential home buyers, including those in the millennial generation, to miss out on getting into a home,” says Christina Bartning with National MI, a private mortgage insurer in Emeryville, CA.

In addition, “grants are an excellent way for young buyers with good credit and stable employment to subsidize their down payment,” says Realtor® Mike Murray of the Murray Home Team at Coldwell Banker in Annapolis, MD. “These can typically be obtained by taking homeownership courses or purchasing in designated community development areas.”

However, if you do put down less, keep in mind you’ll need private mortgage insurance until you pay down the loan to the 20% threshold.

Reason No. 2: ‘I can’t afford a mortgage payment’

“Some people don’t realize the amount they pay in rent is more than if they had a mortgage,” says Realtor Kenneth Cagan of the Cagan Team in Coral Springs, FL. “Landlords are trying to recoup their taxes, insurance, maintenance fees and still make a profit. When you buy, you’re investing in yourself.”

“Laniesha, a young mother of two, gave us every excuse in the book as to why she couldn’t purchase a home, from ‘I don’t make enough money’ to ‘I am not married,’” says Samuel Robinson, NHSR’s marketing and public relations officer. “After explaining that none of these issues could stop her, we worked with Laniesha to pay off her debts and raise her credit score. She’ll be purchasing her new home in 2016.”

Reason No. 3: ‘I don’t have good enough credit history to get a mortgage’

So you’ve made some late payments, or have other skeletons in your past that have dinged your credit score. That doesn’t put a mortgage out of reach.

“If you’ve paid down your credit cards and kept a steady job, your application may be approved,” says SmartAsset’s Smith. “Potential home buyers with bad credit can also explore options like lease-to-buy programs, financing through the seller, and loans from private lenders.”

Meanwhile, you can slowly improve your credit score by paying your bills on time and keeping your balances and inquiries low, says Murray. A licensed loan officer should be able to set up a one-year outline to get your credit on track.

But there’s one substantial caveat: Typically, mortgages for people with a lower credit score do come with a higher mortgage rate. And a very low score may require a higher down payment.

Reason No. 4: ‘I don’t have any credit history at all’

Even without a credit card, there are ways to build credit history, says Anne Postic of Mortgages.com.

“If you’re a renter, ask your landlord about reporting your payments to establish a history. Experian makes it easy for your landlord to report your payments, or for you to do it yourself.”

Reason No. 5: ‘I haven’t been at my job long enough’

“Work history is important,” says Jeremy David Schachter with Pinnacle Capital Mortgage in Phoenix AZ. “But even if you recently changed jobs and have only been there for a month, you can get qualified depending on your income and field.” A letter from your boss or place of employment will go a long way, so be sure to ask if you fear your relatively brief employment history might be an issue.

Reason No. 6: ‘I can’t find a home I like in my price range’

“People often think they have to buy their last home first,” says Fort Myers, FL, Realtor Angeline Sackett. But making a dream home a reality takes time. After all, they call first homes “starters” for a reason, right?

Now that we covered this – why don’t you call The Caton Team and we can help you every step of the way!

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Sabrina Caton - The Caton Team Realtors

Sabrina is a native Californian born and raised in the Silicon Valley with a passion for Residential Real Estate. Partnered with her mother-in-law Susan - they are The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email Info@TheCatonTeam.com
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area.
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